CFA ® or FRM ®: Which is Better Course?
One of the most common questions observed among financial professionals is which course should they pursue- CFA ® or FRM ®? Both of these credentials are quite prestigious and they are equally recognized worldwide.
Let us have a detailed look at both the certifications, their scope, and the career prospects offered by each of these courses.
A holistic view:
- FRM which stands for Financial Risk management is a renowned certified course offered by GARP. If you are more passionate and interested in assessing and managing risk then FRM is the appropriate option for you.
- CFA known as Chartered Financial Analyst is a globally accepted certified course from the CFA Institute. If you are more inclined towards investment analysis and portfolio management then CFA is the right for you.
- The main difference is FRM focuses on risk management whereas, CFA is widely based on investment management areas.
Book your CFA Demo Session Click Here
Exam Structure:
- FRM Level 1 & 2: Both the levels have multiple-choice questions (level 1- 100 questions, level 2 – 80 questions) which has to be completed within a time-span of 4 hours each.
- CFA Level 1: Has 240 multiple choice questions, conducted in 2 sessions. Each session is 3hours long, so the total duration is 6 hours. CFA Level 1 exam is changing to a Computer-based exam with 180 questions.
- CFA level 2: Exam format is mini case studies with 6 multiple choices, also conducted in 2 sessions. Each is 3hours long and this exam also has to be completed in 6 hours.
- CFA level 3: This level consists of 8 to 12 essay questions and 10 multiple choice questions that have to be completed in six hours and is written in two sessions. The essay questions are graded by hand.
- FRM has 2 levels and CFA has 3 levels. FRM level 1 & 2 can be taken on the same day. Both the exams require 300-350 hours of study for each level.
Exam Dates:
- FRM: Both FRM level 1 and 2 are conducted twice a year in the months of May and November. Both the exams can be taken on the same day.
- CFA: CFA level 1 is conducted twice a year in months of June and December. CFA level 2 and 3 are conducted only in the month of June.
Exam Curriculum:
FRM Level 1 focuses on the following topics:
- Foundations of risk management.
- Quantitative analysis.
- Financial markets and products.
- Valuation, and risk management.
FRM Level 2 focuses on the following topics:
- Market risk measurement and management.
- Credit risk measurement and management.
- Operational risk management.
- Liquidity and treasury risk measurement and management.
- Risk management and investment management.
- Current issues in financial markets
CFA focuses on 10 topics:
- Ethical and professional standards.
- Corporate finance.
- Economics.
- Financial reporting and analysis.
- Quantitative methods.
- Alternative investments.
- Derivatives.
- Equity investments.
- Fixed income.
- Portfolio management and wealth planning.
Book your FRM Demo Session Click Here
Pass Rates:
- FRM: The passing rates for both the levels are around 40-50%.
- CFA: The passing rates for all three levels are around 40-50%.
Job Prospects:
- FRM will provide you prospects related to risk management such as credit risk analyst, market risk analyst, compliance analyst, etc.
- CFA will provide you opportunities such as portfolio manager, research analyst, investment banking analyst, consultant, etc.
If you want a specialization in Risk Management then go for FRM but if you are open to extensive areas in Finance then CFA is the certification for you.
Related Post:
